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Broker
Definition of Broker
A broker is an intermediary between a securities exchange and investors. Only registered entities can place trades on a securities exchange. These members can be individuals or firms known as stockbrokers.
That’s why investors must go through a broker when they want to trade or invest in stocks, ETFs, futures, options, and others.
That’s why investors must go through a broker when they want to trade or invest in stocks, ETFs, futures, options, and others.
Related Terms
Operating Leverage
Operating Leverage is a measure of how much a company's operating income changes as its sales revenue changes. It is defined by the ratio between fixed cost and variable cost within the cost structure of a company. A company with high operating leverage has a higher percentage of fixed costs relative to variable costs. Companies in capital-intensive sectors such as manufacturing, telecommunications, or infrastructure are likely to have high operating leverage. High operating leverage can result in a higher increase in profits as sales rise, but can also cause a higher decrease in profits as sales fall.
Quantitative Analysis
Quantitative analysis (QA) is the application of mathematical and statistical modeling, measurement, and research to understand and predict behavior in the financial markets. Quantitative analysts use complex mathematical models and algorithms to analyse trading opportunities, manage risk, and execute trades using large amounts of historical data and computational power, rather than qualitative factors such as management experience and company reputation.
Butterfly Spread
A butterfly spread is an options strategy that combines bull and bear spreads to generate a small chunk of profit. To achieve this, a butterfly strategy consists of four positions in four options contracts that have the same expiration but different strike prices.
Alpha
An Alpha indicates the measure by which a stock or portfolio has managed to outperform a benchmark like an index of shares.
A positive Alpha means that the security or portfolio is beating the market while a negative Alpha means that it is lagging.
Alpha can also be used to measure the competence of a fund manager and their strategies.
A positive Alpha means that the security or portfolio is beating the market while a negative Alpha means that it is lagging.
Alpha can also be used to measure the competence of a fund manager and their strategies.
Average Daily Trading Volume
The Average Daily Trading Volume (ADTV) is a technical indicator that indicates the number of shares that were bought and sold on average across one or more trading days.
A high ADTV means that more investors are interested in a stock while a low ADTV implies that a stock isn’t on the radar of many investors. The formula for Average Daily Trading Volume (ADTV) is:
ADTV x days = Total trading volume of stock across x days / x days
A high ADTV means that more investors are interested in a stock while a low ADTV implies that a stock isn’t on the radar of many investors. The formula for Average Daily Trading Volume (ADTV) is:
ADTV x days = Total trading volume of stock across x days / x days
Assets
An asset is anything that has economic value and is owned by an individual, company, or group. Assets are bought to generate returns in the future.
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